Analyst Somesh View - Closing Comments on 07th OCT 2021

2021-10-07 16:57:28 By Somesh

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Nifty formed a small bodied candle and an inside bar on daily chart which indicates a tug of war between bulls and bears.

After opening in green, Nifty maintained the lead and closed with a gain of 0.85 percent at 17796. Whereas BankNifty closed with a gain of 0.63 percent at 37757 and Sensex with a gain of 0.80 percent at 59667.

After a sell off in the previous session, Our Market rebounded a day before the Reserve Bank's monetary policy announcement.

Reserve Bank of India's Monetary Policy Committee (MPC) will announce its bi-monthly meeting outcome on 8th October 21. Expectations of the central bank retaining its accommodative stance without any change in key policy rates are high in the market.

Bulls stepped up the accelerator ahead of the RBI policy led by the Auto Index which was up 4.5% in afternoon trade today. As the festive season commenced we saw heightened activity in textiles, consumer durables & real estate stocks. 

IT Index lent good support ahead of earnings starting tomorrow. While the street would be keen to watch the RBI stance tomorrow, the market breadth was very good with the small & midcap indices buzzing with optimism.

Market witnessed some positive movements and an attempt to hold the level around the Nifty level of 17700. Market shows that it is going to be crucial for the short-term market scenario to sustain above the 17800 level. 

If the market is able to sustain the level of 17800, it can witness higher level of 18000. The momentum indicators like RSI and MACD indicating positive momentum is likely to continue.

Domestic market clawed its way out to a gap up opening following strong global sentiments, as US debt default worries calmed along with easing bond yields and crude oil prices. The domestic market was pushed by strong buying in auto, realty & IT sectors which bolstered the market to sustain the trend in favour of the bulls. 

Despite the global semiconductor shortage, auto stocks sparked a rally in hopes of demand revival during the festive season while the expectation of better Q2 numbers for IT and strong pre-sale numbers helped the realty sector.

Nifty has formed a Doji kind of candlestick pattern which points out confusion between a buyer and a seller. Moreover, the index has been trading above 21 DMA, which points out strength in the counter.

Nifty can face resistance at 17915 level and a good support can be seen at 17688 level.

Momentum indicator stochastic is trading with positive crossover, which adds strength to the counter. On an hourly chart, Index has been trading with the support of the middle band of the Bollinger band formation, sustain above the same can show further upside movement. At present, the Index has immediate support at 17500 level, while resistance comes at 17900 level.

Nifty had a sharp bounce after a steep decline on October 6. This bounce is a part of the short-term consolidation process. Structurally, the consolidation over the last few sessions has taken form a triangular pattern. With today’s bounce the Nifty has once again tested upper end of the pattern & formed distribution over there throughout the day.

Except oil & gas, all other sectoral indices ended in the green, with Nifty realty and auto indices rising 4/6 percent. Midcap and smallcap indices added over 1 percent each.


Closing Comments

Expert's View


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